Why Japanese Stocks Could Outperform with Howard Smith - FEG Insight Bridge
Money For the Rest of Us
J. David Stein
4.5 • 1.4K Ratings
🗓️ 5 March 2025
⏱️ 50 minutes
🧾️ Download transcript
Summary
This week on episode 514, we share a conversation between Howard Smith of Indus Capital and Greg Dowling of FEG Investment Advisors on why Japan could surprise investors over the next decade with strong investment returns. David introduces the episode by sharing his key takeaways from the discussion.
FEG Investment Advisor is David's former institutional advisory firm, where he worked for 17 years, before founding Money for the Rest of Us. Greg Dowling is Chief Investment Officer of FEG, and David's former business partner and colleague.
Topics covered in the episode include:
- The false narrative that Japan is a difficult place to invest with subpar returns
- Why Japan's national debt problem is not as worrisome as the U.S. national debt
- Why the Japanese yen is tremendously undervalued
- How Japan's corporate governance has improved
- Opportunities in Japanese technology industries
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Show Notes
Berkshire Hathaway 2024 Annual Letter
Related Episodes
468: Lessons from Japan’s 34 Years of Stock Market Underperformance
235: What If Home Prices Always Declined
178: Japan and the Impact of A Shrinking Population
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Transcript
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| 0:00.0 | Welcome to Money for the rest of us. This is a personal finance show on money, how it works, |
| 0:05.2 | how to invest it, and how to live without worrying about it. I'm your host, David Stein, |
| 0:10.5 | and in this episode, we'll release our second in our monthly series of podcast episodes, |
| 0:16.7 | produced by my former institutional investment advisory firm, F.E.G Investment Advisors. |
| 0:23.3 | Their podcast is the FEG Insight Bridge, hosted by Greg Dalling, FEC's chief investment officer |
| 0:30.3 | and head of research. Greg and I worked together for years as part of FEC's investment |
| 0:34.7 | committee. In this episode, Greg interviews Howard Smith of Indus Capital. |
| 0:40.0 | Indus is an independent, partner-owned asset management firm that focuses on Asian Pacific |
| 0:46.0 | Equities. Howard is a partner at Indus and portfolio manager for the Indus Japan Strategies. |
| 0:52.3 | He has spent almost his entire 30-year-plus career following and |
| 0:56.6 | investing in Japan, including living a large portion of his adult life there. Warren Buffett in Berkshire |
| 1:03.1 | Hathaway's recently released shareholder letter mentioned it had been six years since Berkshire |
| 1:08.3 | began purchasing shares in five Japanese companies that he said |
| 1:13.0 | very successfully operate in a manner somewhat similar to Berkshire itself. Buffett continued, |
| 1:19.2 | we simply looked at their financial records and were amazed at the low price of their stocks. |
| 1:25.7 | Berkshire anticipates increasing its ownership in these Japanese companies. |
| 1:30.3 | Yet, in previous episodes of money for the rest of us, we've discussed some of the challenges |
| 1:35.7 | Japan faces with an aging population, high national debt balance, and extended periods of |
| 1:41.9 | stagnant prices. Japan is one of my favorite places to visit, |
| 1:46.3 | so I was intrigued when FEG decided to dedicate an episode on investing there. |
| 1:52.3 | Smith mentioned some of his favorite things about Japan, |
| 1:55.1 | but this is his statement that really caught my attention. |
... |
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